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first time homeowner tax deductions

post #1 of 4
Thread Starter 

We are in the process of buying our first home.  I am assuming we should just go ahead and keep records of everything.  Any advice on what is tax deductible?  There has been so much to learn about buying the house and now I want to make sure I understand what is deductible and will benefit us as homeowners.

 

Thanks.

post #2 of 4

Because of our income level, the standard write-off is a better deal than itemizing.  We could deduct our mortgage, and since DH is self-employed we could take a "write-off" (actually deferment) of certain expenses, plus a percentage of our yearly taxes.  But that gets paid back when the house is sold, which I don't like.

 

Last year was the first time we hired an accountant, and we really needed one with an inheritance and other things.  I was steeling myself to the cost because I knew we needed it that year.  It ended up costing us only $125.  Only that much?  This year we have renters in our old house, and that's something new, so we will go back again.  I highly recommend it.

post #3 of 4

The main ones are

PMI: if you are putting less then 20% as a down payment then you will be paying PMI / mortgage interest on the loan. This PMI is deductible.

 

Mortgage interest: this is the interest payment of the loan; each month you make a mortgage payment, a small portion goes to the principle, the rest is interest - so this is a big tax deduction throughout the year. As teh years go on, this amount will shrink.

 

Property taxes:

 

And the first year you do taxes as a home owner, there may be 'the points" or some other small payment that you can claim.

post #4 of 4

I found the best way to learn about what was useful to keep was to play pretend in turbo tax and let it ask me all the questions.

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